Why Wall Street may appeal to millennials

Wall Street's giant paychecks are getting harder to come by. Not only are financial regulators considering tightening up compensation for bankers, but the banks themselves are cutting jobs and running more efficient operations.

Still, "the people who join Wall Street they know the rules of the game before they get started. I don't think it's going to really decrease — anybody who's new, who's coming out of grad school, who wants to work on The Street— I don't think this is going to dissuade them at all," said John Ricco, partner at Wall Street recruiter Atlantic Group, in an interview with CNBC's "Power Lunch"Friday.

His comments come as the National Credit Union Administration proposed a rule on Thursday that aims to increase employee's access to incentive-based compensation from three years to four. The regulating agency argues that some financial institutions failed due to "excessive-risk taking encouraged by incentive-based compensation arrangements, which rewarded senior officials based on the volume of business they generated, regardless of whether the institution subsequently made or lost money on that business."

Still, market watchers remain fearful that if policy doesn't affect job growth on Wall Street, job cuts from the institutions will, as recently banks have been cutting jobs.

"The young guys, they're still going to go to Wall Street and try to learn the business, but I think the top talent of some of these banks will go to other places that are not so regulated," FBR Capital Markets' Paul Miller told CNBC. "Places like JPMorgan have lost a lot of talent over the years, as people have left the banks," he added.

It's not fun to work in an overregulated industry, such as Wall Street, he said, adding that people will likely leave in the scenario where their income is being deferred for four years.

Ricco argues that, "people that who join in Wall Street firms—they kind of know the deal when they get started; I mean, hiring is cyclical," he said. "What goes on is that when the markets are strong and it's a bull market that's out there, compensations increase. When markets are down, it's a bearish market; they go in the opposite direction."

Job related issues are not the only woes in the financial sector. Bernie Sanders and others have been advocating to break up the big banks. Some investors argue that the banks are not generating growth against the broader market. For instance, Bank of America's stock has been up 22 percent in the last five years, while the S&P 500 stands at 56 percent growth in that time. Meanwhile, other banks, namely Morgan Stanley, have only grown only about 4 percent.

Miller notes that regulators are unlikely to actually break up the big banks.

"The government is just going to make it uncomfortable for them to operate and wants them to simplify themselves to the point where their return on capital does not reach their cost of capital, so therefore eventually they will break up," he said.

CLSA's Mike Mayo told"Power Lunch"that the point of these regulations is to make sure the banks are safe, but he maintains that "the banks are safe; the balance sheets are stronger than they've been in over a couple decades."

—CNBC's Jon Marino and Brian Sullivan contributed to this story.